Implications of the Special 301 Report for IP Rights Holders
The United States Trade Representative (USTR) has released its 2026 Special 301 Report. Although Indonesia has introduced several improvements in its IP regulations and processes, the country remains on the Priority Watch List. The report assesses the state of intellectual property protection and enforcement in trading partner countries.
For rights holders operating in Indonesia, the report is worth reading carefully.
It reflects many of the enforcement realities that SKC Law’s clients encounter regularly, and it signals the direction of regulatory and enforcement reform over the coming years.
What the Report Says About IP in Indonesia
Counterfeiting and Enforcement Gaps
Enforcement against counterfeiting remains insufficient. The report notes a lack of deterrent-level penalties for IP infringement in both physical and online markets, and few investigations or enforcement actions targeting online sellers of pirated or counterfeit goods.
The USTR observes that as manufacturing has moved from China to Indonesia for goods such as footwear, local manufacturing of counterfeits has also increased. The absence of a specialised IP unit under the Indonesian National Police continues to limit the scale and sophistication of investigations into the criminal organisations behind counterfeiting and piracy.
For a recent example of how coordinated enforcement can address counterfeiting at scale, see our case study on the destruction of over 34,000 counterfeit bearings in Jakarta.
Border Enforcement and Customs Recordal
Border enforcement could still be improved. Although the Directorate General of Customs and Excise (DGCE) holds ex officio authority to detain infringing goods and has established a recordation system, the USTR finds that few foreign rights holders are able to use it.
The barriers are practical: local domicile requirements and large deposits that must cover the value of seized goods during enforcement, which are forfeited if the goods are not proven counterfeit.
The brand protection implications are significant: the recordation system contains only a small number of trademarks and copyrights, and the DGCE has yet to make full use of its authority to detain infringing goods at the border.
Online Piracy and Copyright Infringement
The report highlights homegrown piracy sites and services, unauthorised camcording, and unlicensed software use. Copyright infringement through piracy devices and applications continues with limited enforcement efforts against their operations. Concerns have been raised, including overbroad exceptions to provisions that prohibit the circumvention of technological protection measures.
Patent and Geographical Indication Concerns
The report raises questions about patent Indonesia working requirements and compulsory licensing provisions under the Patent Law, including clarity about how rights holders should meet the requirement to submit annual statements on patent implementation. Read our blog on the new Patents Regulation 6/2026.
Concerns also persist about Indonesia’s law concerning geographical indications, which raises questions about the effect of new GI registrations on pre-existing trademark in Indonesia rights and the ability to use common food names.
Developments and Progress in 2025
IP Enforcement Task Force and Online Piracy Cooperation
The report acknowledges progress in several areas. The IP Enforcement Task Force has continued its work to raise awareness among government agencies and push for increased investigation of IP cases. The Ministry of Communications and Digital Affairs and the DGIP have increased cooperation on addressing online piracy. The government is reportedly considering the formation of a larger, national task force for trade monitoring and intellectual property enforcement.
The U.S.-Indonesia Agreement on Reciprocal Trade
The most significant development is the U.S.-Indonesia Agreement on Reciprocal Trade, signed on 19 February 2026. Under this agreement, Indonesia has committed to a number of specific IP reforms:
| IP reform area | Indonesia’s Commitment |
| IP Enforcement | Significantly increase IP enforcement actions |
| Customs Recordation System | Eliminate local domicile requirements for customs recordation |
| Technological Protection Measures (TPMs) | Criminalise trafficking of devices that circumvent TPMs |
| Anti-Camcording Measures | Criminalise unauthorised camcording |
| Copyright Protection Term | Extend copyright protection to 70 years from first publication for works not measured by the life of the author |
Indonesia has also committed to protecting against unfair commercial use and unauthorised disclosure of test data for pharmaceutical and agricultural chemical products, and to provisions that preserve market access for products using common food names alongside geographical indication protections.
These commitments, if implemented, would address several of the structural barriers that have limited enforcement effectiveness for years.
What This Means for IP Enforcement in Indonesia
For rights holders managing IP portfolios and enforcement programmes in Indonesia, the Special 301 Report confirms what practitioners on the ground already know: the enforcement framework exists, but its effectiveness depends on how proactively it is used.
In enforcement matters SKC Law has managed for multinational clients across consumer goods, industrial products, and luxury brands, the practical barriers cited in the report are familiar. Criminal enforcement, while available and effective when properly executed, remains underused relative to the scale of the problem.
Indonesia’s new Criminal Code (KUHP), which introduces corporate criminal liability for IP offences, may help address this gap over time.
For businesses that depend on registered trademark protection and brand protection in Indonesia, these reforms could meaningfully change the enforcement landscape.
However, commitments and implementation are different things. The USTR has stated that it will closely monitor Indonesia’s progress in delivering on these reforms, and rights holders should do the same.
Practical Steps for Rights Holders
The Special 301 Report reinforces the importance of a proactive, multi-layered approach to intellectual property protection in Indonesia.
1. Register trademarks with the DGCE customs recordation system. If the local domicile requirement is eliminated as committed, this will become a significantly more practical enforcement tool for holders of Indonesian trademark registrations. Rights holders should be prepared to file recordations as soon as the reformed framework is in place.
2. Maintain active online monitoring programmes. The USTR confirms that counterfeit sales have shifted online. Platform-based monitoring and takedown programmes remain the primary mechanism for addressing online copyright infringement Indonesia, and should be treated as an ongoing operational function, not a one-off exercise. Indonesia has also introduced a new mechanism for reporting online IP infringement that rights holders should be aware of.
3. Invest in intelligence-led physical enforcement. The report notes few investigations targeting the criminal organisations behind counterfeiting. For rights holders in high-risk industries, coordinated enforcement actions that combine online intelligence with physical raids remain the most effective way to reach the source of counterfeit supply.
4. Monitor the implementation of the Reciprocal Trade Agreement. The specific commitments Indonesia has made, particularly around customs recordation, camcording, and data protection, will require implementing regulations. Rights holders should track these developments and adjust their enforcement strategies as new mechanisms become available.
Contact us to discuss your enforcement strategy or any aspect of intellectual property services in Indonesia: enquiries@skclaw.id
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This content is provided for general information only and does not constitute legal advice. For advice on specific matters, contact enquiries@skclaw.id.
